What are the fundamental differences between GDP and GNP?
GNP vs. GDP Investors need to be mindful of the difference between Gross National Product (GNP) and Gross Domestic Product (GDP). GNP: Gross National Product measures the total amount of goods and services that a country’s citizens produce regardless of where they produce them. As a result, GNP includes such items as corporate profits that multinational firms earn in overseas markets. For example, if an American firm operates a plant in Brazil, then the profits that the firm earns would contribute to U.S. GNP. GDP: By contrast, GDP measures the total amount of goods and services that are produced within a country’s geographic borders. Therefore, for GDP purposes, an American company with a plant in Brazil will actually contribute to Brazilian GDP.
